Tobacco grant money triggers lawsuit

December 18, 2006

GARY (AP) -- A company that the father of a city councilman owns is being sued for $251,129 by the state attorney general, who alleges the company misappropriated money meant to support programs to reduce and prevent tobacco use. New Horizons Inc. -- run by Walter Scott, father of Gary Councilman Ronier Scott -- cannot adequately show how the tobacco grant money was used, according to a State Board of Accounts audit of the organization's finances in 2002 and 2003. Walter Scott said the auditors misinterpreted his financial reports, and the state actually owes his company another $77,346 in grants. In a 2005 letter to Attorney General Steve Carter's office, Walter Scott said the auditors had misunderstood New Horizon's accounting practices. He said the organization was following rules it had been given by state and county regulators. The money the state is seeking is part of a $1.08 million grant New Horizons received from the Indiana Tobacco Prevention and Cessation Agency.